The teenage centre-back has signed a professional contract with the club until the end of the season.
The 19-year-old impressed as a trialist in a recent behind-closed-doors friendly against Scunthorpe at Bootham Crescent.
In what is turning out to be a busy Friday for the Minsterman, defender Danny Blanchett has left the club by mutual consent after making four appearances since his arrival in July 2012.
Blackburn's teenage defender O'Connell signed a one-month loan with the Minstermen on Thursday.
The 18-year-old centre-half, who has played for England at Under-18 and Under-19 level, made five appearances for Rotherham while on loan there at the back end of last year and goes straight into York's squad for Saturday's league game at Gillingham.
While, former Cheltenham and Barnsley winger Martin Devaney is currently on trial at the club.
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- Danny Blanchett